Adoption of Standards and Certification among Tanzanian Agribusiness Firms for Export: Demystifying Gaps in Internationalization Theory

Abstract

This paper is based on the thesis that standards and their derivative certification are missing in the rubrics of the internationalisation theory. The paper draws on findings from a study that was carried out to explain the relevance of standards and their attendant certification in explaining internationalisation from the Tanzanian agribusiness context. The study’s three specific objectives were to determine the relevancy of standards in explaining export and internationalisation of agribusiness in the Tanzania context; determine the requirements for the adoption of standards for export; and find out the challenges to the adoption of standards among smallholder producers and exporters. Data from in-depth interviews of five cases were subjected to thematic and cross-case analysis prior to explanation building. The study findings show that, the adoption of standards and certification of agro-commodities constitute an important vehicle for internationalisation among smallholders in the context under review as such certification offers a new explanation to agribusiness firms’ internationalisation. However, the beneficiaries are those capable of guaranteeing smallholders’ vindication and ability to abide by the standards and produce enough quality commodities that meet the requirements and satisfy the demand. The study established that the major constraint defining Tanzania’s agribusiness export is related to the land tenure system, which causes diseconomies of scale. In consequence, production is fragmented into small pieces of land over a wide area. Moreover, neither the network nor the born global or international new venture theories perfectly explain export through certification. Additionally, the resource endowment, capability-building and creation of a competitive advantage edge are an integral part of the big picture regard to the requirements for certification. In fact, the latter partially explains export through certification as a firm could enter into any market that promote certified commodities without necessarily following the Uppsala edicts or as promulgated by the internationalisation theory but partially through the network and meeting some of the born global edicts. In short, internationalisation theories cannot wholly provide adequate theoretical foundation that captures the position of certification in the export business.